Highlights

• PETRA hosted a briefing yesterday to address the recently introduced CRESS Acceleration Package. The government also introduced an additional 4 sen/kwh SAC for green consumers, bringing total SAC charge to 18 sen/kWh.  
   
• The SAC “discount” – while lower than expected, is still a positive catalyst for the sector. We gathered that data centres were keen on CRESS even at 20 sen/kwh and as such, the underlying demand remains robust. To-date, 3GW of CRESS have been submitted via 11 applicants and we expect 1.5GW to be dished out soon. 
   
• We maintain our positive stance on the sector and would accumulate on share price weakness. We expect record orderbook with CRESS wins, and a strong recurring income base from 2029 onwards. Maintain OVERWEIGHT. 
   

Analysis

• CRESS Acceleration Package briefing… The Ministry of Energy Transition and Water Transformation (PETRA) hosted a briefing session to address the recently introduced Corporate Renewable Energy Supply Scheme (CRESS) Acceleration Package. To recap, on 18 Sep 26, the government announced a lower system access charge (SAC) of 14 sen/kWh (from 20 sen/kWh) for firm output for CRESS projects that can come on stream by 31 Dec 28.  
   
• …introduced a 4 sen/kwh SAC for green consumers. In yesterday’s briefing, PETRA introduced an additional 4 sen/kwh SAC for green consumers (offtakers). This brings total SAC for the CRESS Acceleration Package to 18 sen/kwh – a 2 sen/kwh SAC reduction. According to PETRA, the SAC for green consumers represents an additional charge designed to share the consumption and early termination risks borne by renewable energy (RE) developers. Assuming an energy cost of 32 sen/kwh and total SAC charge of 18 sen/kwh, the tariff under CRESS is estimated at 50 sen/kwh. This is still attractive when we compare with the ultra-high voltage (UHV) data centre tariff of 55 sen/kwh charged by the grid (Tenaga).  
   
• 3GW of CRESS pipeline, RM15b orderbook. PETRA also disclosed that the CRESS programme has attracted 11 applicants representing a combined capacity of 3GW. We expect the pace of CRESS wins to accelerate in 4Q26, considering that only about 50% of the identified CRESS projects have been publicly disclosed thus far (Tenaga with 600MW DayOne CRESS contract and Gamuda, SD Guthrie, and Gentari consortium’s recent announcement of a 680MW CRESS contract). 
   
• Our takeaway. The SAC “discount” – while lower than initially expected, is still a positive catalyst for the sector. Importantly, the 14 sen/kwh SAC charged is fixed over a 10-year period, removing an overhang that previously curtailed CRESS negotiations with data centre operators. The 4 sen/kwh SAC for green consumers however, will fluctuate once every three years – aligned to Tenaga’s Regulatory Period timeline. Regulatory Period 5 begins on 1 Jan 28 to 31 Dec 30.